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US Government Sues Adobe Over Hiding Early Termination Fees and Making Subscriptions Hard to Cancel

ByHuey Yee Ong

Jun 19, 2024

US Government Sues Adobe Over Hiding Early Termination Fees and Making Subscriptions Hard to Cancel

The US government has initiated legal action against Adobe, alleging deceptive practices related to the early termination fees and the complexity of canceling subscriptions. The Department of Justice’s complaint, supported by numerous consumer grievances, targets not only Adobe but also two of its senior executives.

This legal action stems from a barrage of consumer complaints nationwide, which highlighted issues with Adobe’s subscription practices, particularly the lack of clear disclosure concerning the costs associated with cancelling a subscription before the end of its term.

According to the complaint, Adobe has been pushing customers towards its “annual paid monthly” plan without adequately informing them that cancelling the subscription within the first year would incur an early termination fee. The allegations suggest that information regarding these fees was either hidden in fine print or accessible only by hovering over small, inconspicuous icons, making it difficult for consumers to be fully aware of the terms.

FTC’s Stance on Consumer Protection

Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection, criticized Adobe’s practices, stating, “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel.” He affirmed the FTC’s dedication to combating these “illegal business practices” to protect consumers from such deceptive tactics.

Adobe’s Defense

In response to the lawsuit, Adobe’s General Counsel and Chief Trust Officer, Dana Rao, defended the company’s subscription model. Rao emphasized the convenience, flexibility, and cost-effectiveness of Adobe’s subscription services, asserting that they are designed to accommodate various user needs and budgets.

He stated, “Our priority is to always ensure our customers have a positive experience. We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process.” Rao announced that Adobe intends to “refute the FTC’s claims in court.”

Why Did the FTC Take Action?

The FTC’s decision to sue followed numerous complaints from consumers who felt misled by Adobe’s early termination fee policy. These consumers reportedly faced multiple obstacles when attempting to cancel their subscriptions, including dropped calls and being transferred among several customer service representatives, which further complicated the cancellation process.

The lawsuit coincides with recent consumer unrest concerning Adobe’s terms of service, particularly the language suggesting that Adobe could use customer work to train its generative AI models without explicit consent. Following the backlash, Adobe updated its terms of service to provide clearer guidelines regarding AI and content ownership, aiming to alleviate customer concerns.

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Featured Image courtesy of Rafael Henrique/SOPA Images/LightRocket via Getty Images

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.

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